IFAs who turn to the top end of the investment market will prosper as a result of depolarisation and the Sandler proposals, according to investment analysts Cerulli Associates.
As part of its latest UK fund industry research, Cerulli predicts IFA market share will increase from the current 44 per cent to 51 per cent by 2006 if depolarisation happens by the end of next year.
It says the numbers of IFAs may shrink as some opt to go multi-tied but those remaining independent will be well placed to boost their market share.
As a result of Sandler, Pickering and CP121, Cerulli predicts a widening gap between the mass affluent and the more sophisticated wealthy investor.
It believes that tied and multi-tied distributors will aim at mass-retail investors, leaving the very wealthy upper end of the market which has more complicated investment needs to IFAs.
Cerulli senior analyst Thomas Marsh says: “Ironically you actually create a bigger chasm between the wealthy and the lower end of the market. IFAs will benefit from these initiatives because they will serve the wealthier clients with more sophisticated needs.”
Johnston Financial Services managing director Adrian Johnston says: “I think there is some truth in these findings. I think that IFAs will always control a large share of the wealthy part of the market.”